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MARTIN MILLS PIPES UP FOR INDIES

In the hopes of creating unity within the recorded music industry, Beggars Group founder and Chairman Martin Mills delivered Friday (2/12) to a group of lawyers and label executives a list of ideas to make the music industry more equitable to independent labels.

Speaking at the Recording Academy’s annual Entertainment Law Initiative luncheon at the Fairmont Miramar Hotel, Mills called on major labels to alter minimum royalty payments, eliminate charges for breakage, expand transparency in digital deals and democratize licensing rates. 

“Accounting and trading practices adopted by the majors by virtue of the leverage afforded them by their scale leave the rest of the industry disadvantaged, under-informed and resentful,” said Mills, whose label group includes XL, home to Adele and Vampire Weekend, 4AD and Rough Trade. “We are not a community any more.”

Secretly Canadian co-founder and co-owner Darius Van Arman, who joined Mills for the keynote session moderated by HITS Senior Editor Phil Gallo, spelled out a personal definition of being an independent. He said independents are  pro-competition, supportive of  open systems, transparency and competitors, and embrace the free market.

“Why would anyone not want to embrace the independent approach?,” Van Arman said, citing the vibrancy of the craft beer marketplace as an example of triumphant indies. “If you look at how the indies are doing right now in the marketplace, we’re flourishing. We’re creating jobs and innovating. We are the very enterprises behind the biggest records in the world right now. Our pro-competitive approach to the market, and our commitment to open systems and transparency that comes with it, is a mighty engine of value. Please, music industry, follow our lead.”

Mills offered a five-step plan to create a level playing field among majors and indies.    

1. To win the support of performers, all labels—majors and indies—should commit to a 15% minimum royalty for digital exploitation for all existing contracts. Not as much as current norms, but way more than many heritage artists are paid.

2. They should also commit to the writing off of all artist balances after 20 years, so that after that point any earnings flow through.

3. Independent and performer bodies are the most effective lobbying voices on behalf of all rights owners, independents and majors alike. Major labels should invest in their food chain by supporting these organizations.

4. Practices of leveraging scale in digital service negotiations such as breakage should cease. Practices in negotiation which leave the artist poorer, confused and alienated should stop. There should be full transparency on digital dealings for all participants, and a fair share of ALL revenues should flow through to creators—as the majors do not yet do. Independents worldwide have already committed to this through the WIN Fair Digital Deals Declaration.

5. The majors  should accept that a track is worth what a track is worth, regardless of who owns it—as used to be the case in the pre-digital world. Through their licensing behavior with digital services, and through their submissions on the recent CRB hearing, the majors have been trying to establish a higher rate for their music than applies to the rest of us. That is no way to be part of a community. The reward for success should lie in the number of plays or streams, not in the value of each one.

After the keynote session, Clive Davis presented Sony Music Entertainment EVP Business Affairs and General Counsel Julie Swidler with the 2016 ELI Service Award.

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